Pakistan is experiencing its greatest economic crisis ever as a result of a significant lack of foreign exchange reserves in the nation. Pakistan’s foreign exchange holdings have decreased by $6.7 billion. China’s investment in the nation has also decreased concurrently. The economy has been negatively impacted by the nation’s dysfunctional politics.
Under its new energy-saving initiatives, Pakistan’s government recently mandated that all marketplaces and malls close by 8:30 p.m. To save the cash-strapped nation an additional 62 billion Pakistani rupees ($273 million), they have also requested that restaurants close early.
With a $1.1 billion IMF rescue tranche blocked due to disagreements over the ninth program review, which was supposed to be finished in November, Pakistan is struggling to allay default fears in both domestic and international markets at the time of the move. The production of inefficient fans and light bulbs was also prohibited starting in February and July, respectively, as part of Pakistan’s energy conservation plan.
Pakistan’s peak summer electricity consumption was 29,000 megawatts (MW), compared to 12,000 MW in the winter, mostly because more people used fans during the warmer months.
As a “symbolic” gesture, half of the street lights across the nation will remain off.
In the midst of the energy crisis, residents of the country’s Khyber Pakhtunkhwa province are stockpiling gas cylinders, according to a live broadcast from Al Arabiya Post. Additionally, the nation’s food problem has gotten worse. Additionally, people were spotted filling their LPG tanks with plastic balloons in several films. In Pakistan, food inflation increased 35.5% more quickly than it did a year earlier, while transportation costs increased 41.2%.
While everything is going on, Sri Lanka has been dealing with skyrocketing prices for more than a year, largely as a result of its greatest financial crisis in more than seven decades. The COVID-19 pandemic devastated tourism and reduced remittances from locals who were working abroad, plunging the island nation into a financial catastrophe. Fuel prices in particular were greatly increased by the war in Ukraine.
The president resigned and left the country in July. By that time, Sri Lanka had already started talking to the IMF, and they had subsequently agreed to a preliminary loan agreement for $2.9 billion.